Monday, December 28, 2009

• Napolitano – Incompetence In Ascendance

When a CEO fumbles and stumbles repeatedly, then demonstrates incompetence, the company’s Board takes remedial action, and if it doesn’t, the shareholders get vocal with their votes. When the head of Homeland Security repeatedly demonstrates an inability to manage, as well as a peculiar ignorance of either mundane or critical facts, does she get sidelined? Not in this Administration.

Janet Napolitano said on CNN's State of the Union, "One thing I'd like to point out is that the system worked." After the Nation had a head-shake wondering what planet she was talking from, she then said on Monday, "No secretary of homeland security would sit here and say that a system worked prior to this incident which allowed this individual to get on this plane.”

This is the same Napolitano who in April of this year, shortly after taking office, demonstrated an uncommon knowledge of geography, international affairs and of recent history, with a claim that the Sept. 11 hijackers entered the United States through Canada. What a great opening statement for a New Administration to make toward its biggest trading partner, and supplier of the majority of its energy needs.

This former Arizona Governor is a self-proclaimed road safety expert because she thought that she could put a dent in the Arizona deficit by installing a photo speed enforcement program. The fact that the systems don’t even pay for themselves, much less bring in tax dollars, escaped her notice, and she went to Washington before the evidence of her mistake came to the fore.

On the list of all services a government provides its population, Security is first and foremost. The position of Secretary of Homeland Security is one that should be filled with an individual who is Ready, Willing and most importantly, Capable, of fulfilling the demands of this most critical post. This administration has deemed that security and terrorism are almost inconsequent concerns of American taxpayers, since it has attached such an inconsequential individual to manage the department. Fortunately, courageous passengers who demonstrated swift presence of mind and effective action trumped the serious breach in National security that resulted from the mismanagement.

One Canadian newspaper in April 2009 asked, in reference to Napolitano, “Can someone please tell us how she got her job?” The question today should be asked of the President, “How can someone this incompetent retain her job, and why has the task become so unimportant?”

Well, while we're asking questions, there's one more question that absolutely must be asked, "Can anyone from this Administration deliver common sense and coherent commentary without a teleprompter?"

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Friday, December 18, 2009

• Tiger Woods – The Hazards Of Assumptions

The floodgates on Tiger Woods news opened and cannot be closed, as he remains the biggest story in all media. Notoriety and cash seeking alleged girlfriends surface by the hour, and rare factual tidbits eek out, tantalizing our celebrity obsessions with a daily fix. Are we actually learning anything from the circus that has become Tiger’s life?

To fuel the frenzy, as if that was needed, Associated Press assigned Woods the title of Athlete Of The Decade. This may simply be an attempt to confuse us at to what constitutes either a “sport,” or an “athlete.” Did Lance Armstrong, Roger Federer, Ronaldinho and Michael Schumacher not demonstrate enough dominance in their “game,” or sufficient superiority of character? Probably, but this isn’t about athleticism.

Woods has dominated Golf, and that undeniable fact has brought him acclaim which in turn has imposed the weight of $100 million in annual endorsements onto his life. The current meaning of endorsement is, “pretend you like our products so that those who idolize you will believe you enough to buy them. Your brilliance on the golf course means you are an upstanding, honorable and respected character. Your word is gold.” Well-crafted endorsements are swarmed by expectations, and tinged by assumptions.

The public assumes that if you are supremely great on the golf course, you must also be gifted with other assets such as intelligence, grace, maybe even a little common sense. No chance that you might be narcissistic or self absorbed, and no chance that you believe your own press. Yet, your biggest challenge is your own ego. It is that Achilles heel that will be exploited by your handlers. Whether or not this is Tiger’s problem, his current state of affairs suggests that he should be more attentive to his hired help. Some of his handlers may not be in his camp and more than a few might truly not wish him well. It doesn’t take a genius to predict that the public will soon be pandered with the required dose of apologetic “addiction” treatment, and sorrowful wistfulness of divorce proceedings as we witness “damage” control. His family, his children, don’t deserve the kind of exposure they will have to endure as they prevail over their uncertain emotional road ahead.

So where does that leave his sponsors? Unfortunately, what we have so far witnessed is not terribly encouraging. Knight, of Nike, has said, "When his career is over, you'll look back on these indiscretions as a minor blip, but the media is making a big deal out of it right now." This is not what anyone should expect from the head of major company. No need to analyze the inanity of this perception since there is little ambiguity in the obvious.

We cannot assume that because someone is the CEO of a company, that the position automatically imbues the occupant with wisdom, principles, ethics, or morals. We can hope, but that would be foolish. The insecure egos running some of our Wall Street financial institutions are currently providing ample evidence that such assumptions can be misplaced – and therein lies a lesson on making assumptions about power, wealth and celebrity.

We are also being reminded that we are in charge of our perceptions. We are in control of what we accept, or normalize as appropriate behavior. While we may not be in absolute control of the appropriateness of everything our children are exposed to, we have influence on what we embrace as the mores that will colonize our own lives and theirs.

Regardless what our mainstream media, or the corporate landscape has decided “sells,” wealth and celebrity are not anointments of “right.” The implosion of Tiger’s familial career reminds us that we should be very discriminate in the broader conditioning to which we accede on our percepts. We should unambiguously guard the nature and the influences that we affirm on behaviors – ours and those of our children. The Nikes and Tigers we venerate cannot do that for us.

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Tuesday, December 8, 2009

• Not Overheard In Copenhagen . . .

As the deceit of the limo-jet-caviar congestion of Copenhagen grinds that city into the forefront of an international tragedy, there will be no mention of humanity’s biggest challenge. Political correctness amongst the 15,000 attendees and the attendant fawning media will ignore the irony of this self-serving and bloated spectacle. They will be excused their extravagance and their obscene carbon footprint, culminated with the arrival of President Obama on Air Force One, and his unsparing entourage. Economic forces along with the political correctness will prevent discussion on the root cause of stress on the earth’s oceans, air, forests, rivers, and lakes. No one in Copenhagen will breathe a word about the world’s population.

The Copenhagen conference is a United Nations gambit using fear of global warming as the apocalyptic Armageddon that will squeeze hundreds of billions of dollars from the United States and Canada, and will redistribute the cash as it sees fit. Copenhagen is not a conference intended to clean up our environment.

Obviously all third world countries run by dictators, as well as the very few who aren’t, will clamor for consensus. Why wouldn’t they? More cash means more Bentleys and Escalades, another mansion or two, as well as a shipload of arms to maintain power. When you don’t care about your own people, but strive to retain absolute power over them with brute force, the least of your concerns is a distraction from foreign fanatics with a cause, but if it’s going to fill your coffers, . . . bring it on. Countries such as China and Russia with a wink and a nod will continue on course, unrattled or swayed by anything the international community has to say, yet surprisingly, they are the only two who’s populations are shrinking.

The only world leader who seems to have kept his wits about him is Canada’s Steven Harper. He is the only leader who has remained cool to jumping onto the Copenhagen climate change boondoggle. He appears to be the only one cognizant of the fact that Copenhagen will not clean up the air, and will only drag his taxpayers into deeper taxation. Obama, on the other hand seems oblivious. Obama’s Cap And Trade program should remain right where it is, … nowhere, and taxpayers should remain skeptical, unlike too many scientists who appear to be closing the books on the supposedly “settled science” of climate change. Absolute certainty, . . . um, is that another term for scientific stupidity? Does that not grate on the “scientific method?” Is this an example of progress toward truth?

Attention should be brought to addressing the world’s continuing population explosion. The Earth’s population has now crossed over 6.8 billion, rapidly getting to 7 billion in 2011. Let’s note that there were only 2.5 billion of us in 1950.

It is reasonable for each individual to have the right to enjoy a positive and fruitful life. Unfortunately, there is a reality that comes with each life here on Earth - each of us requires sustenance and each of us “processes” more or less of the abundance nature makes available. There is only so much we can process in the aggregate before nature’s support system stresses beyond its ability to sustain our needs, never mind our wants. The dead zone in the Gulf of Mexico is one of thousands of examples around the globe of the overburden we have imposed. Technology does not hold the magical answer to sustenance for our ever-burgeoning numbers, and technology will not bring an end to our abundant polluting. Even if we all lived in an Amazon of windmill trees, we would still choke the life out of nature around us.

Beyond the domain of political correctness, lives the game of economics, and the simple fact that the greater the number of people, the more there are consumers. Consumption supplies the fuel for economic growth - growth in products, goods, services and above all growth in the money supply. Growth in global population accelerates the concentration of wealth at the top of the economic food chain. Don’t expect the political or economic leadership to touch the population concern.

The only answer lies in the dissemination of as much education as possible, which will bring positive affect so that a bigger percentage of the earth’s population can exist beyond just the daily struggle to minimally survive. We should call for a World Population Conference, instead of a Copenhagen Climate Change conference, to be convened within a couple of years before the population trend irreversibly crashes into the brick wall of ignorance.

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Tuesday, December 1, 2009

• Transforming Perceptions Of Reality

We have entered a new phase of reality distortion as negative events become positive in their reporting. Truth is being transformed. I don’t refer here to politicians lying about the state of affairs to promote a self serving scheme or other. I refer to the mainstream media and its warped reporting of the reality its audience lives through each day.

Perhaps we subconsciously need the adulteration of our realities, converting them into distracting wishful deceptions. Is there a chance that the effect is dispersing our anxieties? With so many directly affected by a burst-mortgage-bubble recession, positive spins are readily accepted. How else can one explain an acceptance, with all associated relief, of continuing increases in unemployment numbers? Is it because the totals are not as bad as had been expected? How did it make any sense that the financial institutions most responsible for the current state of economic affairs became the too-big-to-fail partners of government? Is there any doubt that Wall Street controls the agenda?

Why is it good news that government has insinuated itself into the heart of American industry while permanently bolstering union influence over the management of companies like GM? Has something new been introduced into the concept of socializing industry? Did Soviet Russia not prove beyond any doubt that government-in-charge doesn’t work? The current version of hope-and-change appears to simply mean Big Government.

Is it really good news that the health care industry is heading irreversibly toward a day when it will be a government run business? Were there not alternative strategies available to seriously improve the state of health care including those discussed here: Health Care - What You Are Not Hearing? But wait, there’s more good news coming, and please ignore the $12 trillion U.S. national debt almost equaling the Nation's GDP, since it only amounts to $111,000 per taxpayer. It is apparently great news that this amount is minor when compared to the funds “committed” to health care and pensions that the Baby Boomer generation is fully expecting just around the corner.

When a President professes concern about deficits, but supports unprecedented spending programs sending the Country into out-of-control deficits and debt, the headlines read, “good news,” because he doesn't really want to do it, but he has to. The media sells us the gossamer subtlety of "intent," to promote acceptability of truth distortion. The fawning mainstream media is doing its best to channel public consciousness down the feel good road.

Look for more government stimulus money to be added to the already pegged $787 billion stimulus, much of which has been allocated to prominent Democratic districts. Over two thirds of the money is still awaiting distribution, obviously being held back for release at the most propitious time in order to achieve maximum influence on upcoming elections.

Fear has been very effectively used through the past few years by government to gain support for the implementation of decisions that might not have easily floated over the electorate otherwise. Positive spin has worked the fear, and converted absurd policies into amplified and satisfying rays of hope.

If the main stream media continues its persistent misrepresentations of the truth, hope will disintegrate completely as new intractable realities insinuate themselves permanently into the economic and social landscape. Taxpayers deserve better from their Fourth Estate and from their politicians. If this transformation of perceptions doesn’t end soon, the result will be an irreversible transformation of America.

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Monday, November 16, 2009

• Show Trial Goes To New York

The significance of continuing growth in unemployment ranks has been obliterated from news headlines by an unexpected decision by the Administration: Khalid Sheikh Mohammed and four other Guantanamo Bay Sept. 11 terrorist detainees will be tried in a civilian federal courthouse in New York.

Democratic support for the decision argues that a civil trial would be a demonstration of America's might and moral certainty, and such a trial would be further confirmation that America’s justice system is the envy of the world. Republicans counter that demonstrating such civility toward foreign terrorists seeking to destroy America’s way of life is a servile and underserved accommodation which would provide a dangerous platform.

This Administration is loath to acknowledge the term "War," particularly as is relates to religious extremists. Does this Administration feel this way because the extremists have bases in various countries and are funded from numerous sources scattered around the world, and therefore it is reticent to antagonize those foreign governments? Is there a concern that acknowledging a war would by inference mean an indirect war on countries from Saudi Arabia to Indonesia? Events wherein people using powerful weapons, funded with hundreds of millions of dollars, launch attacks against a country, its people, its embassies and other outposts, are not just “criminal acts,” they are Wars. Pretending that perpetrators of such acts are not “at war,” but are conducting a broad, concerted effort of criminality, flies in the face of rather ordinary common sense.

Civil trials pointing the guns of American jurisprudence at the most infamous terrorists to have ever committed crimes against America on its own soil will become venues that will launch a new crop of lawyers onto the international stage. Could we dare suspect the Administration believes that a New York City trial for these most visible terrorists will keep the “blame Bush” fires alive.

The loud crowing we hear about exposing the world to the American judicial system is disingenuous. The Islamic world already knows the American system is different from its own and doesn't care how. Most Islamic countries are dictatorships, by any other name, whose leaders don’t much desire open societies, or an American style rule of law. They know it, we know it, and the rest of the world already knows it.

On the other hand, a civil trial, and the legal hams and egos who will run that circus will expose America’s espionage and intelligence systems, and methodologies. We already know waterboarding was used, however, we can expect that it will be used by the defense, and in so doing, once again revisit the application of such torture, purposely putting the previous administration on trial.

We should note that U.S. Attorney General Eric Holder stated that the five suspects prosecutors would likely seek the death penalty. This is not a very definitive statement, but he had to reassure New Yorkers that they would not likely run into these killers while shopping on Park Avenue. We should also note that Holder’s law firm, Covington & Burling, represents seventeen detainees of the Guantanamo Bay detention center. In time we will discover the true nature of such a conflict of interest. More importantly, given the nature of civil trials, the rights provided to (usually) American defendants, the discovery process and the eventual appeals process, American citizens will not find the hands of justice administering punishment on these fanatics until well over a decade has passed.

Fanaticism is deaf to all pleadings, be they judicial, political or personal entreaties. Pretending that a federal civil trial will be a victory against terrorism is flailing against an ill wind, and will accomplish little but inflate the self-righteous.

True and pure statesmanship should be untainted by idiosyncrasies of politics, or political provocation, however, this is evidently too much to ask for. This trial is guaranteed to become a proverbial three-ring circus. We may also become baffled as publicity ignites strange images on the streets of distant cities around the world, as lawyers play their games on this venue in New York freshly served up by the Administration.

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Thursday, November 5, 2009

• The Commander In Chief And Today’s Disaster In Texas

As I watched the first news reports of the Fort Hood Military Base shootings, I wondered what the right response from the Commander In Chief should be to this disaster. At around 2:00PM, we all witnessed the actual response from the sitting President, but what would you have done?

Twelve members of America’s troops are dead, and at least another 31 have been wounded. These 42 soldiers and their comrades were preparing for deployment to the front. This is major calamity, not just because it occurred on American soil, but this crime was committed, it appears, by one some of their own, on an American base. The shock to hundreds of individuals comprising the related families will last a lifetime.

The priority for the Commander In Chief, IMHO, would be to bypass any planned speech and immediately fly to Austin, Texas, act like a Commander In Chief, go to the site of the shootings, meet with senior staff, assess the situation and events that led to the shootings, speak to the troops, particularly the injured, demonstrate concern and take action based on the findings of your assessment. Such actions should include addressing the families of the fallen and the injured. Assure the American people that their military bases and the security of the bases are not compromised and all possible measures will be taken to tighten what already has been established to safeguard the safety of soldiers.

Once satisfied that orders have been issued on all potential fronts of the follow-up, fly back to the White House, and get on with the addressing the challenges of the Nation.

Would you have remained in Washington, and while giving a speech, mentioned the killings in a “by the way," addendum? Perhaps not.

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Thursday, October 29, 2009

• The UN – A New World Power Through Climate Change Fears?

The international movement to provide the United Nations (UN) with unprecedented power and influence over world affairs has found a seemingly innocuous, but deceptive train to ride. The North American perception of this world body founded in 1945 has become that of a vast, but vapid and corrupt organization. The UN “Climate Change” train will change that impression, but not for the better. With support from the Obama administration, the path ahead will place the UN on a track toward receiving an irreversible influence over our lives. The continuing corruption will render untold dividends for the corrupt and morally repugnant.

There are currently 192 countries making up the United Nations members list. The vast majority of the member nations are dictatorships by any other name. You can dress their leaders in fancy robes and toss an occasional crown on a head, but from Saudi Arabia to Libya and Gambia, their leaders oppress their populations. They loot as much as they can from their economies, while enjoying a comforting credibility rubbing shoulders with other narcissistic misanthropes under the opulent umbrella of the UN General Assembly.

The UN has never been an effective vehicle for achieving real peace and security, although it was intended to achieve exactly that when it replaced the impotent League of Nations. The overwhelming power of the United States has been the major underlying force that has prevented major international wars since WWII. The UN has been an inept bystander to international affairs. America’s power and influence has generated kick-back that has been fomented within the UN where jealousy found broad fertile ground amongst a majority of member nations, including Europeans such as Norway, and Denmark. No need here to extend the list of envious pretenders that easily includes the likes of Russia.

The reaction against the U.S. found new energy when the world found itself in an economic recession, and fingers could be pointed at America for having been too self serving. In slide the opportunists. Beating the newfound drums of climate change fear and catastrophe, they will mutate the upcoming Copenhagen meeting on climate change into a perfect vehicle through which begrudging usurpers will once again attempt elevating the UN to status of world power, “over” the U.S.

We can rest confident that the contemplated Copenhagen Treaty emanating from this meeting will find elements to mirror in the cap-and-trade bill now being promoted by Obama and Congress. This, along with the December 10 Nobel Peace Prize presentation, will lock-in support from Washington for the agreement. Obama and Congress will have unwittingly signed on for the formation of Two disasters. The first will be a UN managed onerous extraction of cash from the United States and Canada for what can only be described as payment of a “climate debt.” The second will be the unprecedented endowment of the UN with sweeping powers over the economies of all nations. The text currently contemplated for signing by the membership will provide this body with incisive absolutism over the economic engines that have fuelled both America’s hegemony, as well as its population’s independence of thought and freedoms.

Keep in mind that many, if not most, of the enlightened leaders of UN member countries are the same ones responsible for crimes against humanity, … their own humanities within their own home borders. This is also a membership heavily populated by misogynistic individuals who believe in the subjugation of women and criminalization of homosexuality, all the while pretending to promote the United Nations Declaration of Human Rights.

The time has long passed for the UN’s charter to be changed. The UN has no ability or capacity to act as a world peace maker. It could remain as an organization directed toward humanitarian efforts, and provide a meeting place for resolving broad international challenges pertaining to education, population, or agriculture. It cannot, however, be allowed to morph into a world power. The United States, which funds almost one quarter of the UN’s budget, should not allow it. Obama and Congress should refuse signing America on to the Copenhagen agreement, or any version of it. Copenhagen has nothing to do with cleaning up our refuse or CO2.

I should add a Third ensuing disaster if Copenhagen materializes: A weaker America would not be positive for long term prospects of world peace.

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Saturday, October 17, 2009

• The Obama Nobel Is Not About Peace

We have suffered a week of apoplexy having endured a bombardment of reasons offered to justify a Nobel Prize awarded for expectations and promises rather than results. Our rationality has been addled as all corners of the MSM meandered through fantastic rationalizations. All appear to have missed the mark. The ideologically motivated radicals dominating the Norwegian Nobel Committee, are not seeking peace in the world, but are making a down payment on fortification for their own agenda. The United States and Canada will pay dearly if this agenda materializes.

Let’s first dispel any doubt that the offered reasons for awarding President Obama the Nobel Peace prize were ungenuine. He hadn’t warmed the king sized bed in the White House when he was nominated, which means that any real evaluation of his authentication as a Nobel awardee, other than the oratory of his campaign, was impossible. In the end, the Nobel Committee stated that it, “… attached special importance to Obama's vision of and work for a world without nuclear weapons.” Reality and common sense in both Norway and the White House seem to have vacated the premises.

Promises made by politicians are for electioneering, and they rarely see daylight. Remember when Obama made a bold and firm commitment that he would pull out of Iraq if he were made President? That was a defining and differentiating moment in the race to the Oval Office. Did he do what he committed to do? Are some of his phantasmagorical promises also the delusions of the Norwegian Nobel Committee? We will find an answer in the upcoming Copenhagen climate summit to be held in early December.

140 nations will meet in Copenhagen to replace the Kyoto Protocol, which runs out in 2012, with a global deal supposedly intended to limit CO2 emissions, reduce the destruction of rainforests, and help developing countries to become low-carbon economies. On the surface, the publicly claimed intentions of cleaning up our emissions from our air, our garbage from the oceans, and our toxins from the soil are lofty objectives very deserving of acclamation. The reality that will arise from the United Nations Copenhagen Climate Change Conference will prove to be something altogether different. What is to become the “Copenhagen Agreement,” will in fact be the largest international redistribution of wealth ever undertaken. The Earth and our environment will enjoy no benefit.

On December 10, Obama will receive his award in Oslo, just in time to energize the “Copenhagen” agenda. Whether or not he shows up at the UN meeting, the ideological intensions and expectations have been air freighted in the form a Nobel Prize. The Nobel awarded to Obama is a very personal stimulation to procure his support and therefore the financial commitment of the U.S. to a blueprint claiming to save the world.

The Copenhagen meeting in December will require that the United States and Canada annually transfer billions of dollars to the developing world as “climate debt” for past transgressions in their emissions of CO2. A key element in the penalization process will be the degree to which a developed country meets an allocated allowable emission schedule. Countries like the U.S. and Canada will have a tougher time than most, since it is always the last 10% or 20% that is the most difficult and most expensive to “scrub” from your emissions when you have already done more than most to clean up your own mess.

Developing countries will be using starting points with disastrous emission levels, comparable to that of the U.S. and Canada over a century ago. Minor improvements will give poor countries a leg-up on developed countries. Industrialized countries will in effect be penalized for already having well equipped, technologically advanced infrastructures. Canada in particular will very likely incur the highest penalties per capita since it is a net energy producer with production requiring extensive energy consumption, and it endures cold winters and hot, humid summers. This is not to say that every industrial sector should not strive to reduce its carbon footprint. We all should. The conundrum rests in what methodology to apply to the process and to enforcement given the reality that much has already been done by developed countries, and more is planned since all levels of society have become conscious of the need to reduce pollution.

The transfer payments from developed nations to poor ones will be made through purchases of unused “credits,” as well as through outright payments which will be made over and above the current billions distributed as foreign aid. Developing countries will be compensated for “lost opportunities, resources, lives, land and dignity,” and the funds are to be divinely distributed by the United Nations. The UN will also be the arbiter of good taste in all things CO2 emissionable, including all approvals of emission scrubbing plans and the ensuing allocations of emission credits. The agreement also leaves room for developing countries to do absolutely nothing on emissions should they feel they are not receiving enough technological and financial support from developed countries. How is that for a backdoor to escape adaptation?

An invigorated and supremely powerful United Nations is in the offing. The principal justification for turning the UN into a true world power is this: The most advanced industrialized countries are responsible for global warming which in turn is responsible for the drought and famine being suffered by the poorest nations, ergo, the most developed countries owe cash to the undeveloped ones. How more obvious can the planners be than allowing rich countries to buy offsets rather than make emission cuts at home?

Kyoto’s good intensions have mutated into a politically charged Copenhagen draft agreement for a global plan to redistribute wealth to the tune of an estimated $1.4 trillion over the coming decade, which in and of itself will have little or no impact on pollution. The agreement’s impact on climate change will be even more amorphic, nevertheless, we can expect an abundance of fear mongering on the road to ratification.

Obama’s upcoming acceptance of the Nobel Peace Prize and the invisible strings attached to it, while he is quite entitled to claim it, along with his plans for Cap and Trade, may prove to be an enormously expensive exercise for all taxpayers on this continent. The “Copenhagen” supporters on the Nobel Committee, on the other hand, are counting on it.

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Monday, October 12, 2009

• Economy – The Outlook Is Your Outlook

You can listen to conflicting opinions of self proclaimed experts on government activity or lack thereof on “stimulating,” the economy, however, the reality is that the economy’s progress remains in your hands. The top of the financial food chain with the government’s help wants to prejudice your perception toward positive spending.

The American taxpayer is provided an abundance of opinions and fantasies surrounding economic progress packaged as truths, facts or principles. The certitude applied to the delivery of this inspiring radiation has maximum impact on the behavior of the audience.

The vast central swath through the middle of the American political spectrum representing a majority, seeks reasonableness from government. The majority expects its business to be conducted with some integrity, without the encumbrance of concrete boots of left or right extremism demanded by party affiliation. This expectation of common sense, and forthrightness has not been honestly accommodated by politicians. The cost of reaching elected office has so escalated that special interests have become the overwhelming force behind all thrones influencing legislative agendas. As a result, every utterance emanating from a political pulpit has become suspicious.

When Paulson and Geithner browbeat their economically illiterate, and incurious bosses, into bailing too big to fail financial firms, and to launch profligate spending programs, the taxpayers had no input, nor were they provided enough truthful information to know right from wrong. Furthering confusion came in the form of suddenly popular Keynesian economists affirming government stimulus spending. Their continual proclamation of mission accomplished, and the recession is over, has become a tired refrain.

With unemployment hovering at 16%, when you include marginally attached workers and part timers for economic reasons, the principal energy in the system is the government’s $1.25 trillion mortgage support program artificially inflating home prices, borrowed with future taxpayer sweat.

The two principal pulls at opposite ends of the government intervention string, are Financial Stimulus, and Lowering Taxes. The arguments move the cursor of political will along this confusing line with abundant force pulling effectively from both ends. Over the long term, practical evidence suggest that there is little positive impact on GDP from supposed spending multipliers, so the amount spent as financial stimulus will not find itself increased or even mirrored in the amount of the nation’s gross domestic product. From the other side of the great divide, the lowering of taxes has shown some positive affect, however long-term impact has been almost impossible to empirically quantify.

In the middle, rests the most reasonable path which mandates that government, and politics (humans guided by special interests), remain out of the equation altogether, with some leaning toward easing of corporate and personal taxes, and reducing government expenditures. As his will not occur, and as we have seen, the likely reality is for a continuation of tax increases facing the enormous deficit demanding to be satiated.

Your perceptions as consumers, and taxpayers, will impact economic activity. You will dictate the direction, which the economy takes, and through that process, minimize the influence from politicians and experts confusing your judgment with mutable notions of economic confidence. Instilling confidence is intended to move consumers to borrow and spend. Ignore the noise.

As the recession continues, and it will, we should all remain diligent with each dollar we earn, and even more so with each dollar we borrow, unlike the examples set by Washington.

The biggest financial decision we make pertains to our dwellings. We will be hearing newly energized implorations of mortgaging ourselves into evermore elaborate dwellings, or increasing the debt on those we already inhabit. The reality remains that a home’s increasing value should never become a source of newfound cash while we live in it. Perceive your home as an expense if you have purchased one. If you still rent, congratulations, you have bypassed the heavy stress that millions of mortgage borrowers have endured over the past couple of years.

As the ravages of unemployment persist, we can each contribute to a return of long-term national economic stability by viewing each dollar we earn as if it were your last one for a while. The behavior might just be contagious, and will hopefully spread long enough for political representatives to assimilate the message since elections don’t appear to change much in Washington’s behavior.

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Sunday, September 27, 2009

• Obama’s Blunder On Iran

We cannot listen to Iran’s Ahmadinejad posturing on the expansion of the Iranian atomic energy program, without recalling Obama’s dramatic reversal on the U.S. land based missile defense system in Europe only days ago. The blunder was not in the reversal, but in its timing and its process.

The degree to which Iran has advanced its uranium enrichment capabilities will remain an unknown factor, and the international community reaction will continue to be perplexed, and marooned in paralysis of fear. Iran will not let anyone into whatever enrichment facility exists. No one will see what the ayatollahs do not wish to make public, sending us into recollections of the disastrous outcome following a long hide-and-seek dance with Saddam Hussein seven years ago. This leaves the world, Israel and the U.S. in particular, with a conundrum of literally seismic proportions. Iran’s nuclear progress is not new, nor is it news. What is new is the loss of one very powerful strategic negotiating tool that could have been useful in addressing Iran’s dangerous belligerence – the land-based European missile defense system.

When Obama backed off the deployment of a missile defense system in Europe, he did so without gaining a single concession from Putin and Russia. Russia had long blustered and railed against the U.S. missile deployment plan. Putin claimed the missiles were intended to threaten Russian sovereignty in the region, and that they were not meant to defend against Iran. The hovering menace from the U.S. was a significant affront to Putin's self-image. Obama’s abrogation of such significant “stance” on behalf of the United States suggests that this Administration learned nothing from the Ronald Reagan approach to international negotiations. Reagan changed the world when he boasted of his Strategic Defense Initiative satellite based defense system. The long list of concessions extracted from Gorbachev by Reagan, as well as his brilliance throughout the process of negotiations, should be compulsory reading for any student of Presidential impact on history.

Disclosure that Obama has known about Iran’s second uranium-enrichment facility all along, and that he has supposedly sprung an international trap for Iran, as some media such as the Washington Post are now suggesting, is peculiar analysis, as well as it is pandering in the extreme. Obama gave up a major negotiating card that could have been used to push Russia toward joining the strengthening of sanctions against Iran. China cannot be counted on to assist any future confrontation with Iran, having taken itself out of the equation with investments in Iran to feed its own requirements for energy and natural resources. The only other power, whose advocacy is truly needed in the region for serious containment of the ayatollahs in Tehran, is Russia. China and Russia provide Iran with enough trade to successfully finance the Ayatollahs through many more elections no matter what sanctions Obama might think of adding to the existing limitations. Iran’s path to becoming a nuclear power appears unobstructed.

The alternative to the controversial land based system being mothballed, according to Obama, is cheaper, quicker and more effective. This means the decision to embrace the new technology is very likely a good one. If you had this information in hand, would you have run headlong into an announcement, given that the planned European shield had been a major thorn under Putin’s belly? The diplomatic clout that the West’s tension with Iran has provided Putin still remains, and no concessions have been extracted, nor are we likely to see any extracted in the near future. Russia’s response has been to provide more rhetoric, and more blustering. The Russian envoy to NATO, Dmitry Rogozin, said, “… Americans have simply put their own mistake right. And we are not duty-bound to pay for someone to put their own mistakes right.” Putin will continue to view Iran as an economic opportunity that will be exploited without interference from the West. The threat of crisis and instability in the region will also maintain energy prices at levels that Russia requires to finance its annual operating budget.

Adding to the confusion of signals emanating from the White House, Obama suggested that he could resurrect the European missile defense plan if Russia doesn’t help with the threat presented by Iran. This kind of accessory statement further weakens America’s hand. It suggests a lack of resolve on the initial reversal of the strategy, and it also infers apprehension about the new strategy and the underlying technology. Can America rely on the new capabilities and technologies or not? Are the interceptor capacities more flexible and cost-effective? Are the advanced sensor technologies capable of detecting and tracking enemy missiles, or aren’t they? Why would Obama even hint at such uncertainty?

The signals showered on Americans and their allies by this Administration’s decisions and announcements are confusing, but to Russia, they seem to be welcome and they reinforce its strategy of saber rattling. Sanctions have also not deterred Iran's ayatollahs. Now, with the loss of a major strategic and negotiating option against the Kremlin, the enlistment of the Russian bear’s assistance will undoubtedly be impossible, and will lead to a more belligerent Iran. We can expect an increase in its destabilizing activities in Iraq and Afghanistan, and its financing of terrorism. The violence we witnessed against the Iranian people after the recent elections should be indication enough that a strategy pursuing, "engagement that is honest and grounded in mutual respect," as Obama wishes it, is simply just that, … wishful thinking.

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Tuesday, September 15, 2009

• Health Care – What Are You NOT Hearing?

The lawyers and legal minds holding the joystick of politics in America’s White House and Congress, are afraid to make a move. The administration and legislature are staying away from confronting their friends, and former classmates, in the legal profession.

America is holding fast on its resistance to health care reform. The double talk and confusion from Washington is abundant, however the leadership is unwilling to implement changes that could dramatically reduce health care costs such as those that could easily be acted on pertaining to tort reform. We are provided claims such as those from the “nonpartisan” Congressional Budget Office report that malpractice litigation represents only 2% of health-care costs. This one is very “misleading,” since lawyers have always made up the majority of representatives sitting in Congress. It also purposely ignores the real costs burdened onto physicians, and the costly “actions” they take to protect themselves from being financially wiped out. Insurance premiums are just the beginning of the overhead. Defensive medicine has nothing to do with health care, but with doctors protecting themselves, and there is almost no viable measurement on the hundreds of millions that this truly mounts to.

You could extrapolate some numbers such as the 83% of doctors in Massachusetts who order tests they know are unnecessary in order to minimize their potential liabilities. When doctors already pay up to $250,000 per year in malpractice insurance, it is understandable that protecting themselves as much as they can, comes naturally. This is defensive medicine, … not the good kind, but the expensive kind. These tests are not preventive care defending patients against future illness. These defensive actions come from doctors protecting themselves against lawyers of the ambulance chasing kind. While some doctors can be accused of offensive medicine by ordering extra, not wholly necessary tests, don’t believe for a moment that there can be no agreement on what constitutes defensive medicine. You might also ask yourself on average, and in their general population, would you trust more of the doctor, or would you trust more of the lawyers?

Federal tort reform must be implemented, such as bringing under control the size of verdicts handed down by the courts, as well as placing serious caps on noneconomic and punitive damages. It is also critical that the fees taken by law firms in all such cases be reviewed and percentages controlled and capped. Let’s not submit to the bromide that lawyers are society’s first line of defense against private or civil wrongs. That claim is a virtuous and finespun abstraction on justice, no matter how much we wish it to be a truism. We have been witness to enough abuse of the legal system by lawyers over the past twenty years. It is time to close the open season trial lawyers have enjoyed on the medical profession, and bring the enormous judgments into the realm of reasonableness.

Obama refuses to support limits on liability. Does he really want reform of the medical care system? His words are delivered emphatically, but they are vacuous. He seems incapable of taking a specific stand against his friends and financial supporters in the legal profession. Congress is right behind him from both sides of the isle. Neither Democrats nor Republicans seem willing to launch a determined heads-on confrontation with the waste, although some of the reticence can be explained by the fact that the Democratic party took $47 million in contributions last year from the its benefactors in the legal profession. The lip service we are subjected to is easily dispensed, but accomplishes little. The White House and Congress would demonstrate more honesty if they would only pick a side, … address health care needs of taxpayers OR admit to supporting the very financially supportive legal profession.

There is much to be fixed before you ever get to a complete overhaul of the health care system. When there is a dearth of will to implement partial corrections, or controls, pertaining to waste and abuse in the existing system structure, there can be little hope for serious reform other than pursuit of ideological doctrine. Tort reform would be a start, though only a start, on the long road to an improved and sustainable system.

The American public is right to be suspicious of leadership that will not take immediate and specific action that would reduce an estimated $200 billion dollars from the Nation’s annual medical bill. How can taxpayers not be apprehensive of a program whose point person, Secretary Kathleen Sebelius, previously led the Kansas Trial Lawyers Association? This is more assurance that “change,” is not coming.

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Tuesday, September 8, 2009

• Political Campaign Funding – A Democracy’s Dilemma

Tomorrow, the Supreme Court will hear arguments on the constitutionality of the restrictions that have been placed on corporate money in politics. The ruling may be one of the Court’s most critical decisions in an age which has seen one Presidential campaign accumulate almost a billion dollars in contributions. When the constitutionality of any far reaching federal law is opposed, it is a matter of national relevance, however, when a law affecting the foundation of the Democracy is challenged, such event should be arousing everyone’s notice and should be at the forefront of all news media outlets.

The case in front of the Supreme Court, Citizens v. Federal Election Commission, revolves around a documentary called “Hillary: The Movie,” produced by Citizens United. Based on Hillary Clinton, the film was banned for violating the McCain-Feingold bill which requires disclosure on funding sources, and stipulates that neither corporate or union treasuries can finance any “ad” pro or con just before a primary.

The 2002 Bipartisan Campaign Reform Act (BCRA), also known as the McCain-Feingold bill, was the last major piece of legislation passed to control the source of financing for Federal political campaigns. The bill eliminated soft money donations to the national party committees, and restricted the funding of political pronouncements, ads, etc., by corporations, or organizations such as unions and non-profit organizations.

The arguments and presentations beginning tomorrow in front of the Supreme Court, will address a question all voters should take a stand on. Are your rights to free speech the same as the rights of corporations or organizations? Corporations and organizations are not individuals, they do not have the inherent rights of the people, nor do they have the same privileges. They are vehicles created and used by society for diverse purposes. Voters should seek to minimize their further influence on the political process and on the political landscape.

You will hear and read arguments whining that the government is treating organizations big and small, unfairly by prohibiting election advocacy, and is in effect imposing censorship. Some suggest that such treatment of organizations provides them less protection in the eyes of the law than is provided to individuals. The suggestion that organizations should be equal to individuals under the law twists the interpretation of the Constitution beyond common sense, and ignores the fact that current laws provide organizations with rights and privileges not available to individuals. Let’s not let anyone convince us that organizations are “persons.”

You will also hear that the media companies have no restrictions on their election leanings, or that restrictions do not apply to them and should therefore equally not apply to other corporate entities. While it is true that media companies have been given a pass on their ability to “manipulate” opinion, this is not a persuasive argument for overturning laws that in themselves do not go far enough in the restrictions of campaign finance.

The First Amendment of the Constitution explicitly prohibits Congress from infringing on the individual’s freedom of speech (other than inciting government overthrow), and as we long ago learned, free speech is a great freedom, but is not so “free.” While you may be able to shout your ideas, demands or wishes freely out your window to the extremes your lungs will allow without bursting, you will not achieve the reach that well financed organizations are able to affect as they shout at you through your invasive televisions.

This court decision revolves around financing free speech, but at its heart is the impact the decision will have on ability of organizations to influence voter perception. Organizations large and small already have too much influence on the electoral process. Corporations and labor organizations already impact election outcomes through such vehicles as Political Action Committees (PACs), or through the doors of political party organizations. We should note that the billion dollar campaign which carried Barack Obama into the Oval Office could not be audited by the Federal Election Commission (FEC) because the task was too onerous. Do not believe the pretense that the FEC is a watchdog, or does its job of monitoring campaign contributions, much less where and how the money is spent.

Allowing entities to finance the formation of perceptions, places a vast amount of power in the few hands at the helms of those entities, far overreaching the capacities of their “rank and file.” Politics have always been and will always be subject to self-serving influences. As wealth concentration continues unabated, effective control of the political process has already been skewed away from the average taxpayer. Simply put, the CEO of Goldman Sachs reaching into the company coffers has access to more money than you do to impact the outcome of an electoral campaign, and it’s not even his money. Neither shareholders, nor his employees, have any say on the candidate receiving the CEO’s largesse.

Some alternative legislation should be considered, including anonymity of donations, capping personal contributions and matching them with government funds, as well as eliminating all corporate and union political contributions and related loopholes. Beyond cleaning up the abuse of the process, this would bring campaign funding and spending within realms that might foster the advance of alternative parties to the political game on the national stage.

Should the Supreme Court overturn years of tested law in favor of corporate and union spending, it will relegate the taxpaying voter to that of second-class citizen, and insinuate a gigantic crack into the democratic process. No matter what the Supreme Court decides, the voter should take a stand at the poles with facts rather than with the prejudice of well-financed and influential rhetoric and advertisements.

High definition cameras bringing the drama into public consciousness should invade this upcoming Supreme Court hearing, and educate voters on the fundamental process none can take for granted. A Democracy is a very fragile environment demanding fastidious nurturing. “We the people,” was never intended to mean, “We the corporations and unions.”

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Thursday, August 20, 2009

• America, End Your Fear Of Wall Street

Few Americans have the time to educate themselves on the operations of those who control the most critical elements at the heart of the Nation’s well being. The Kings of Wall Street have long coveted the absolute supremacy they now enjoy over the largest economy in the world. Their road to ascendancy has been long and methodical, but with the collapse of the mortgage and equity bubbles, the past year’s actions by those pillars of persuasive absolutism on Wall Street confirm that their dominance is unprecedented in American history.

A vast majority of Americans must have been astounded by Bernanke’s recent response to Congress’s request that the Government Accountability Office (GAO) audit the Federal Reserve’s financial transactions and assets. The following was the heart of Bernanke’s response, “… auditing ... would be highly destructive to the stability of the financial system, the dollar and our national economic situation.” The GAO is a legislative branch agency organized under the U.S. Congress. How is it possible that Bernanke would have had the guts to tell Congress to go fly a kite? This is the same Federal Reserve whose power Obama wants to expand? Does he really have a good grasp of the true nature of Wall Street and the functions of its insiders? Perhaps the $14 million he received from Wall Street bankers, investment firms and securities brokers during the election campaign are clouding his perception.

Bernanke not only screamed an emphatic, "no," but he had the gall to threaten Congress and the American people with economic destruction. How is such arrogance and power remotely possible? While it might be tolerated if coming from the oval office, it should not be tolerated from a banker. It is also, for anyone who is watching, an obnoxious affront to the Constitution as articulated in Article I, Section 8, “The Congress shall have power to … coin money, regulate the value thereof, and of foreign coin, and … to borrow money on the credit of the United States.” Does this resemble anything we have witnessed during the past year? Not remotely.

Through a century of market ups and downs, interest rate fluctuations, mergers, acquisitions, political influence, lobbying and positioning insiders to the most powerful government and government related institutions, the Kings of Wall Street have nurtured and advanced their isolated power to a point where they are responsible to no one. After the Fed created hundreds of billions in bailout dollars to purchase unaudited toxic waste from its “friends,” these same friends paid themselves billions of dollars in bonuses. These were billions more than the amounts they distributed to their own shareholders, and the rationalizations were as asinine as the bonuses. Obama’s wishful thinking and promises of “oversight and transparency,” over trillions of Fed dispensations, have long been attenuated by the dissonance of fear. Stating that the Fed and Wall Street’s autonomy is complete, would be a gross understatement.

When Bernanke told Congress and the world that if AIG was not bailed out, the international economic order would come tumbling down, did the majority of his listeners believe him? Absolutely. Panic was being incessantly pounded into the public’s consciousness. Unless a handful of senior players from the banking sector didn’t get their way, the underpinnings of the global economy would disintegrate, and the world as we knew it would come to an immediate halt. Paulson chanted the refrain, and shortly thereafter so did Geithner, whose performance made sure that the message was delivered with the requisite amount of perspiration and earnestness accentuating the urgency. Above all, he underscored the fear.

Individuals, who could not care less about the health of America, just as they never cared about their firms’ clients, control the economic engines of this country. Their egos dictate their actions, and satisfaction of abnormal greed is the compelling priority. The details of the business, and its legalities, … be damned. Have we forgotten that when Lehman Brothers collapsed overnight, no one knew there had been a problem? None of its executives were familiar with the extent of the calamity when it hit their firm, nor did their books indicate where assets might be hiding or what claims might exist against them. Transparency? Due diligence? Forget being a shareholder looking for information since the senior executives, the CEO and the Board of Directors were oblivious. Was there any conscious human being near the top of the Lehman ladder who cared enough to raise doubts? Would he or she have been listened to? Not likely.

When you are too preoccupied picking out the leather for your new executive jet, or refurnishing your third mansion in Cap D’Antibe, you don’t have time to spend on corporate incidentals such as the details of an audited financial statement. Even if there had been a spare moment, you’d have to fly to that Bridge tournament in Chicago, … or some other urgent pastime where your “friends,” or your ego expect an appearance.

There is a culture of omnipotence that has been very pervasive throughout all of Wall Street’s major firms during the past two decades. It has reached a level of absolute and supreme potency within a few of its more majestic mindsets like those at the top of firms such as Goldman and Morgan. These firms have by design created complex webs of interwoven corporate entities, crossing geopolitical borders with questionable practices beyond the boundaries of laws and oversight. Theirs has been a comfortable ride, since there is no will on the part of any government to provide intrusive oversight to the investment banking giants, therefore effective oversight is simply an ephemeral, wishful thought on the part of a cornered public.

The Morgan Stanley acquisition of Bear Stearns with a $30 billion taxpayer guarantee was a sweet gift handled between the boys, with little evidence of hard-nosed negotiating on behalf of American taxpayers. Obviously, reasonableness also never entered the room. Bailouts for Citigroup, AIG, Bank of America, Citigroup, and AIG were negotiated between friends, some friends only pretended to be working on behalf of the American taxpayers. When Treasury, The Fed and the heads of the major Wall Street firms, particularly Goldman Sachs and Morgan Stanley, came together to make deals, their actions were not “negotiations” as defined in any normal dictionary. Who really represented taxpayer interests? No one. The Third Side, the taxpayer who will foot the major risk, was not in the room. Not only were taxpayers not in the room, but they were also swindled. There is no other way to describe the one sidedness of the structures that taxpayers were handed.

Taxpayers recapitalized banks under insanely bad terms and conditions, where they unwittingly guaranteed toxic asset, as occurred in the Citigroup bailout or when B. of A. acquired Merrill Lynch. Did anyone question B. of A.’s use of TARP funds to “acquire,” competitors? No-one representing taxpayer interests seemed to care, and quite to the contrary, Merrill’s losses were purposefully concealed from both investors and regulators. Did anyone negotiate hard with these banks, B. of A., Goldman and Citi, when as creditors to Chrysler, they forced its destruction instead of allowing the government to provide it with deals as sweet as the ones they had received themselves? Not much. Geithner and Bernanke were evidently not close friends of any Chrysler executives or employees residing in Detroit. They were, however, friends and colleagues of Wall Street.

We have written elsewhere on this post about Too Big To Fail, however, with the taxpayer’s willingness (through inept government) the crisis has created ever-larger monsters on Wall Street. America’s vast banking system has become weak and remains weak other than for those at the top of its food chain. The controlling players have not changed, and the economic contraction will continue. We have become numbed to the fact that when banks fail, the public pays. A few companies, under the aegis of a small band of individuals created the perfect environment for the implosion of the banking system through massive risk taking. Congress cheered actively from the sidelines. The Wall Street hands that were in large part responsible for the crisis now dictate government actions, and have effective control over the public purse. In the meantime, the Fed, standing squarely on the backs of all taxpayers, is doing the job of large banks that still refrain from injecting credit into the economy.

While megabanks trade publicly, there is a dearth of verifiable, or incisively auditable value that can be placed on them since it appears none of their executives know the extent of the worthless paper lurking deep in their bowels, and none of them would tell you if he knew. Admitting the size of the toxic assets would require enormous write-downs, and would affect their bonuses as well as the values of the company shares.

We should not get swayed into believing that Too Big To Fail is simply a remote concept dealing with enormous corporations with global reach. Too Big To Fail refers to individuals at the top of these financial giants with all of the substantial power that the companies they manage can wield. Too Big To Fail encapsulates the stupidity that brought the world to the brink of collapse. We are just a couple of mergers away from a global financial power that will be impossible for any government to regulate, although regulation already seems nonexistent for any of the current top players on the Street.

The markets are technically driven and managed by systems that maximize profits for those who control them, using technologies that very creative talent produced. There is no ceiling to that creativity, and no end to what might be done to restructure the financial underpinnings and superstructure of the nation’s economy. The talent is available, and all that is required is willingness to do so. Constitutionally there are possibilities, but relinquishing control over money is not an alternative Wall Street will readily agree to, yet, reversing the process is within the purview of Congress.

The key to minimizing the future damage that the kings of Wall Street might further inflict on the Nation is to bring their power and influence into the realm of reasonableness. This means bringing their propensity for size to within reason for any organization involved in pure “banking,” and focusing their attention to providing large and small companies with the services, particularly credit, which they require to remain open for businesses.

There is a lesson to be learned from the current debacle, while the window remains very clear, and before time and retrospect blur the current reality into a distorted sequence of lies as the months advance. In order of priority, the following should be considered for a sound America going forward.

1. Take back control of The Fed. Humans will be human therefore there are no guarantees that the people’s representatives will act with foresight, however, they will accountably serve under the canopy of transparency, and due diligence, rather than submit to the beck-and-call of those whose billions in annual bonus money stagger the imagination.
2. Take back control of money.
3. Segregate “Banking,” from “Investment Banking,” and everything else that seems to attach itself to the once-upon-a-time credibility of banking. Reinstate the Glass-Steagall Act (except as it pertains to the Fed) that was for the most part repealed in 1999 eliminating the restrictions of affiliations between banks and “investment banks,” … and don’t listen to any bankers who tell you different with stories about diversification reducing risk, or banks being completely capable of regulating themselves. We have seen the evidence. One very intelligent provision contained in the act is section #32 that prohibits banks from having interlocking directors. Such decree could well be applied to other industries where “Board of Directors,” has simply become an incestuous and corrupt exercise.
In the same process, throw out that brilliant piece of Congressional ingenuity called the Gramm-Leach-Bliley Act.
4. Cap the size of banks so that their executives more naturally demonstrate concern for soundness of lending decisions, and the well being and success of their regional customers. Banking should be a service, and should not be a casino where the management can pilfer the till as has been repeatedly demonstrated wantonly by the major Wall Street firms.
5. Allow the FDIC to do its job, and instruct it to play serious hardball with the risk takers who come into its line of sight.

This is not minor tweaking of the system. This is also not a call for the establishment of a consumer protection agency to police all things financial from credit cards to mortgages. Common sense dictates implementation of a structural reconstruction. The proposed Consumer Financial Protection Agency would only be an ill-defined expansion of the government payroll, proliferating government reach into more corners of society. This make little sense since there are agencies already entrusted to protect consumers which are not doing their jobs. Proposing the launch of such an inappropriate meddling amoeba is evidence of government ignorance of the realities on Wall Street.

America, your government is lying to you. You’ve been had, and are being had. It has no idea what is going on with your money. Those few bureaucrats who have ensconced themselves in positions of unnatural power and influence, and who manage the joystick, won’t tell you the truth. Even more pathetic is the fact that neither Congress, nor the President, know enough about the mechanics of America’s economy to apply practical judgment decisions in the refashioning of the system, … nor, it seems, do they have the will to act. Considering the fact that the current administration continued the trend of installing those who had a healthy hand in packing the powder keg that ignited into the economic disaster now encumbering the nation, we cannot expect much change. The billions of dollars that politicians received from Wall Street over the past decade through campaign contributions and lobbying, was insurance on their continuing silence, and stifled any burgeoning ethics.

Taxpayers have become disillusioned by the abuse they have endured at the hands of special interests, and the lack of intelligent, common sense response from their elected officials. A broad swath of the electorate is wearied. Congress should pay attention to 2012, and the electorate should demonstrate a little selfishness. Taxpayers should look for some creative thinking instead of the tired old nursery rhymes dispensed from portable pulpits.

Banking is not a magical, abstract, or obscure foreign art, although some of the fringe elements have become complex by design, such as the proliferation of derivative financial instruments. Government is protecting special interests and is NOT forcing a restructuring of America’s financial system. Taxpayers should demand that capitalism be reinstated back into the banking system. They should demand that Wall Street’s power elite end its mortgaging of the American future. Taxpayers should ignore platitudes and bromides from Obama and Congress, and they demand a break-up of Wall Street’s major players.

Taxpayers should be lining up in the next elections to install individuals into Congress, no matter what party they might represent, who will take back control of the most important components of the economy, and ensure that the country has a chance at a sound future. The electorate should not allow the continuing concentration of financial power to accumulate in fewer and fewer irresponsible and egocentric hands.

Take control back from Wall Street, demand transparency, and quit bailing out firms that should be allowed to fail. Stop being mesmerized by the pretense and illusion that was perfected under Alan Greenspan. Take back control of the money supply before another crisis turns a struggling economy with escalating debt, into a long term depressed economy.

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Wednesday, August 5, 2009

• Obama & Middle Class Income Tax Increases

The recession is dealing a hard blow to government revenues with tax receipts expected to drop 18 percent this year. The big question being lathered across the Nation, but not being answered honorably by the Administration, revolves around tax increases. The double-speak and denials are only adding annoyance to the feelings surging around the stress already felt by the taxpayers. Not only will the “middle class” be saddled with fresh tax increases, but so will you and your neighbor if you live in America.

The strategy of repeatedly pretending that only the wealthy are going to pay for the massive spending increases is quickly getting old and not believable. From the mansions in Beverly Hills to the park benches of Central Park, all residents will be sending more dollars to the government in one way or another. This is not about new tobacco or alcohol consumptions taxes, or even about the massive tax-grab that will come from Cap And Trade, this is about new tax measures, and new taxes on everything that can be squeezed for cash starting with your income. Forget the campaign promises you almost believed about middle-class tax cuts, and forget Sunday meet-the-press equivocations by well-trained emissaries like Geithner and Summers. Your taxes are about to increase dramatically.

The Administration is very demonstrably building a government well beyond anything that national revenues will be able to support either in the mid-term, or the long-term. With the Nation stuck in a long-term economic quagmire hurting all taxpayers who are already feeling the weight of chronic tax-creeping, the imposition of obvious and visible new income taxes is politically dangerous. The sophistication of the speciousness will find new levels of creativity during the coming weeks.

The White House will no doubt launch a campaign to “talk-up” the economy in the hope that positive proclamations will make them so. Reality is that unemployment, well above the claimed 10%, is somewhere around 16% when you include “marginally attached workers” as well as those employed “part time for economic reasons,” calculated as the “U-6 rate” by the Bureau of Labor Statistics. Unemployment increasing is neither a turn around, nor a bottom to the recession, and is a far different reality from the “8% or less” predicted by the Administration when it launched its stimulus program. So much for rose-colored forecasting by economists.

Tax receipts are apparently down by 22 percent on individual incomes, and are down 57 percent on the corporate front. When you blend that with a deficit that will surge to almost $2 trillion this year, and a National debt accelerating past $11.6 trillion, your options are limited. We can assume that cutting federal spending is an ideological impossibility, leaving the government with two principal choices, and neither induces positive tingles up your spine. You can be asked to sacrifice and have your income taxes increased massively, or the dollar’s value can be allowed to drop significantly as more of them get printed. The likely path will be a less harmful blend of both of these alternatives. The key will be to allow the dollar’s value to slide gradually so that there are no sudden shocks striking at the heart of national and international markets. International creditors like China will be irritated, but will accede to the gradual process of easing down the dollar. Forget the doomsday scenarios, however, America will take years to work its way out of this recession, then pay off past and current government spending sprees, on its way to growing through the new financial demands on its treasury that will surface over the next decade from baby boomers, social security and healthcare.

In order to initiate an advance on the lengthy economic turnaround, the joy ride of debt-spending-with-wanton-abandon mindset enjoyed by Bush and continued by Obama must be brought to a close. Deficit growth cannot continue on a path exceeding the rate of economic growth. The Administration should surface out of its decision closet, and become resolutely emphatic on a course of action that will reverse the deficit's current trend. Obama’s next address to the Nation should be, “I know I promised that if you made under $250,000 per year, you would not see your taxes increased a single dime. Not your income tax. Not your payroll tax. Not your capital gains tax. No tax. I was wrong. I was hasty in forming that covenant with the electorate. We are a government living beyond its means, with currently no end in sight to the discrepancy. Here is my plan for an overhaul of the tax code, and what it will mean to every single one of you. You can expect your income taxes to increase an average of ten percent, for starters. Now, about a national sales tax, …”

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Thursday, July 30, 2009

• Government Capping Compensation?

As you shelter yourself in a cool closet from the hailstorm of healthcare promotion, Congress and the President are sliding into home plate with compensation controls in the senior offices of financial firms, … for starters. The new Corporate and Financial Institution Compensation Fairness Act will provide no other than the SEC with the ability to establish the rules on how executives are paid, and will enable government agencies to effectively control the “inappropriate risks,” practices of financial companies. Institutions with less than $1 billion in assets will be exempt. This further intrusion into the fiber of corporate America by those who have completely failed in carrying out their responsibilities to the electorate is another misguided kneejerk reaction.

This bill will empower government bureaucrats to control compensation plans that will threaten the safety of financial institutions, or adversely impact economic conditions or financial stability. Have no fear, the newly hired experts will figure this part out, what it means and how to implement it, and they will diligently look after your interests.

There’s hope, however, with some minor good news in this bill that resides in its provision for procedures for shareholder approval of golden parachutes. What this portion of the bill looks like in final form will dictate whether or not it makes any sense, but in the meantime, three cheers for the crumbs thrown at demands for common sense. We shall not hold our collective breath. Another clause that might have provided teeth in a corporate structure fix was the providing of a voice to shareholders on executive pay. It failed miserably in its final form, since the shareholder vote on executive pay will be non-binding, therefore will leave shareholders where they were before, … “we’ll tease you with a little influence on the company you own, but, … naah, just kidding, get lost and go back to your trading screens.” Shareholders, large and small, should have greater influence on the proceedings of the public companies they own, and such influence should be addressed at the Board of Directors level. The government is not improving the lot of shareholders, but is escalating its own intrusion into the boardrooms of America.

We should remember that this is the same Administration and Congress that couldn’t even track the bailout money, or put strings on the money to restrict it from getting dished out in the form of bonuses. This is also the government that threw those billions at financial institutions on the pretext that they had to be bailed, to avert a depression, yet no one in government could tell you where that money actually went. So how was it, exactly, that those bailout billions were allocated? The toxic assets could not be defined or audited, which means that the fear mongering and threats were outright lies. Wall Street skunked this Administration, as well as the last one, and as a result a colossal extortion of the taxpayer was allowed. Did anyone making these horrendous decisions ask the hundreds of thousands of businesses from coast to coast what their banking preferences might be? … Would you rather deal with a gigantic-too-big-to-fail-market-dominant bank headquartered in New York, or a medium or smaller sized regional bank? When did “failure” get expunged from the dictionary of American Capitalism?

Government intervention has reduced competition in the banking sector, allowing the favored few bailout-receiver-therefore-government-backed behemoths to attract investor support, and has enabled their acquisitions of not so fortunate competitors.

All of this frenzied government activity pretends to be response to the outrage against some of the insanity exercised by some like AIG, Goldman Sachs, and Morgan Stanley. The $11 billion plus, awaiting the bonusable at Goldman should soon make for incendiary fireworks, and support the government cause. Using public anger as cover to implement invasive measures is rather expected from a government that has failed to acknowledge or accept any responsibility for the environment that incubated the bubble which burst into a recession. Giving more power to vehicles such as the SEC for example, reminds us of the abject incompetence the SEC demonstrated through the economic extravagance that allowed Wall Street the power and influence to exploit, and then erode, the financial health of the Nation. Did the SEC also not have a front row seat to Bernie Madoff’s implementation of an extensive 40 year long grotesque personal compensation program?

Sweeping expansion of government incompetence into corporations is an invasion that will not be reversed. Other more intelligent policies should be considered instead of launching clusters of bureaucrats to invade company offices in all corners of the country. One could consider implementing laws against monopolies, but it would be more effective to start with segregating the large banking institutions into more pure line of business sectors. It really comes down to reinstating certain portions of the Glass-Steagall Act that was repealed in 1999. Hundreds of millions were expended by the large banking institutions to achieve the repeal of the Act, therefore a reversal would be very difficult. Given the present climate of Washington dependence on Wall Street cash, even “difficult” might be a stretch, however, such reinstatement would bring back some peace of mind to taxpayers in the long-term.

The critical functions provided by undistorted banks operating within narrow guidelines should be reconsidered. The contamination of many banks over the past decade, with the annexation of such things as brokerages, and the underwriting or trading of complex securities, should be reversed. Government should direct existing oversight bodies to perform their duties, including the enforcement of laws dealing with asset requirements, capital ratio leveraging, and lending guidelines. Then, government might provide shareholders with more teeth to bite when necessary, and leave them to rule over freshly formed and more independent Boards of Directors.

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Saturday, July 25, 2009

• Government vs. American Capitalism

For a generation, now, we have been accommodated with a front row seat to a rigorous and seemingly intractable advance of government into the whole of America’s social fabric, and into the institutions of its capitalist system. Today we are confronted with a wave of negative wind pushing against the capitalism that has brought America its unprecedented success, as it absorbs the blame for the economic meltdown.

I am not equating capitalism with free markets here as is too often done, because that would imply an inclusion of international communities into a common basket, and there has to be balance and common sense in the application of “free trade,” between participants as we have discussed in previous articles.

Recessions inevitably deliver capitalism a bad rap. Making matters worse, there are usually groups or individuals who have taken advantage of power and influence, or who hustle the provenance of panicked confusion into magnified opportunities for fortune creation. All the while, wide swaths of society are struggling to meet basic needs. Visible abuse of the system that leads to wealth concentration provides thresholds over which those so inclined will leap to promote expansion of government and its insinuation into the corporate fiber of the Nation. Such intrusions usually come from those with little grasp of the elements at the heart of economic growth, human nature, creativity and the human spirit. On the other hand, extravagant, unrestrained, and unconscious excess fosters jealousy, and reaction. It can also propel overreaction, which in turn empowers those in government who seek increases in government intervention at all levels of commerce.

Such exercises in reactive belligerence pretending concern for the public “good,” are actually acts of self-interest intoxicated by ideology, or worse, driven by overwhelming ego. The reactive process ignores long term consequences of hysterically applied policies, and absolutely cannot effectively evaluate the secondary or tertiary repercussions.

We lament the often-declared unintended consequences of unctuously presented self-righteous actions such as the promotion of dubiously structured mortgages. It is reasonable to expect a chicken in every pot. It was, however, unreasonable to have politicized the American dream of home ownership into a structural expectation and promoted it as a fundamental right. Somehow, the “home” became the vessel that would bring forth the promise of collective prosperity. Both of the dominant American political assertions, Republican and Democrat, signed onto the program. Both sides of the political isle bent all rules of common sense to exert pressure in effort to curry favor with the electorate, and corporate benefactors, while satisfying expectations of lobbyists.

The department of Housing and Urban Development from the early ‘90s on, pushed minority applicant quotas on mortgage bankers, and set targets for the purchase of less than median mortgages by Fanny Mae and Freddie Mac (FM & FM). With the taxpayer on the hook for trillions in questionable debt, banks and bank executives were dancing in risk-free ballrooms up to the rafter in money. As the trillions accumulated, FM & FM, with the applause of Wall Street financial institutions such as Morgan and Goldman, “creatively-accounted” for the real value of the toxic assets that taxpayers would one day be required to cover. Oversight? Sure there was oversight – oversight that appropriate kickbacks made their way to all of the proper pockets. The Clinton Administration and Congress pushed banks to adhere to the Community Reinvestment Act (CRA) in order to be allowed to diversify. Again, where was the risk? Thank you FM & FM. No, make that, thank you taxpayers. Then along came George Bush with the American Dream Downpayment Initiative (ADDI) signed into law in December 2003 to increase home ownership rates with funds to be provided to first time buyers for down payments and closing costs.

Making matters more fragile, in came galloping the Morgan and Goldman types, smarter and more ruthless than the deplorable dunces at AIG who were easily perverted into insuring Collateralized Debt Obligations, and seducing banks to over-leverage, using complex instruments the bankers didn’t understand. The financial community availed itself self-servingly of the opportunity created by the government’s intervention. Morgan, Goldman and other investment banks made billions selling tainted goods to banks and to foreign governments. Lack of awareness and understanding by the general community encouraged a galvanization of international endorsements for what were worthless toxic assets from the outset. The long-term consequences of this extensive and forceful government intervention will have unintentionally synthesized some extremely substantive burdens on our grandchildren.

What old and repeated lesson has once more been reinforced from this generation-long exercise?

Government is using taxpayers’ money to build powerful infrastructures that will in effect work against them, and encroach on their freedoms. Uncontrolled government intervention and cronyism are destructive potencies that destroy the fundamental bulwarks of the capitalist system, and Washington has been practicing the schemes for too long. In so doing it has eroded the openness and efficiency of America‘s economic broad-wealth creating environment. I say broad because any government reinforcement of excessive concentration of wealth and power is not conducive to the long-term health of the broader society.

Entrepreneurial energies bloom most abundantly in small clusters. The more the better, but each succeeds best without encumbrance of committees, or group designed strategies. Government on the other hand is by its nature a giant mushrooming amoeba, incapable of creativity, requiring endless approvals, with all departments and agencies in a continuous phase of expansion, justified by egos requiring satisfaction and aggrandizing the turf. Government bureaucracy instills dependence upon itself whenever and wherever possible. History shouts that dependence on government becomes dangerously habitual, and leads to loss of liberty. That goes for individuals, as well as for businesses.

Stifling true entrepreneurial spirit will destroy that critical energy at the foundation of the American economy. It is this fundamentally critical energy that strives to anticipate needs or wants of the broader society, then creatively delivers solutions, and augments output. It strives to become educated in order to better understand whatever might advance its ascent along the risky path to success, and endeavors to minimize its assumptions. Above all it applies as much common sense as it can muster to minimize the chances of failure, and improve the odds of producing something greater than what began. As this energy succeeds, many prosper and benefit. Entrepreneurial independence operating within the boundaries of the Nation’s laws has for two centuries differentiated America from every other country on Earth.

It is understandable that not everyone can be an entrepreneur in the strictest sense, however, each can be entrepreneurial in personal practice and mindset, and each one of us can be thoughtful. At the very least, we can all void jealousies that might restrain that spirit in others, or attempt to obstruct their right to exercise positive natural tendencies and capacities. So doing might quell the demagoguery that is inflating the ascent against the private sector, productivity, and the creation of wealth.

We should not accept deceitful rationalizations artfully packaged through demagoguery and homiletics, or allow them to deliver prepackaged thinking on our behalf. We are presented with economic realities which demand reason, and summon our uncompromised reasoning. The economic challenges presented should apprehend the participation of the whole of population. Such participation is occasion for self-education at a very singular level to understand, as much as is possible, all of the causes that led to the events now chastising the country. The comprehension will guide the electorate toward a more judicious discernment, as it navigates through the political passage ahead. Assuming that others “on The Hill,” will have the answers, would be a gross abdication of rights and capabilities.

Capitalism provides the platform for the individual to push the boundaries of creativity and productivity in the creation of wealth. Government’s role is to protect the environment, through laws, and judicious oversight, within which capitalism is allowed to strive. Broad participation is required, without ambiguity, if there is to be sensible pushback on the advancing and infringing hoards from “The Hill.”

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